There have been so many conflicting reports on the status of the real estate market, so Pam Milani, SIRVA's VP Corporate Real Estate, is sharing the facts.
- The unemployment rate has in fact dropped in 45 states for the first quarter of this year (Source Article).
Some regions of the country are actually showing definite signs of improvement (Source Article for list below).
- Home prices in Phoenix and Tampa appear to have bottomed out, and are expected to see some slight gains throughout 2012.
- The southern states are showing some signs of strength.
- The Northeast and Midwest still remain weak.
- The Western states are turning the corner.
- Overall, home prices are expected to increase by possibly 1.2% by the end of this year, based upon current market trends (Source Article).
The reality is, prolonged and sustainable recovery in the housing market hinges on two key items:
- Mortgage restrictions. Yes, we know that prior to 2008 lenders were overly flexible with the lending guidelines, and this contributed to the collapse of the banking industry. We get it! But now the banks have gone 180 degrees the other way, and tightened mortgage eligibility guidelines so restrictively as to negatively impact U.S. home sale activity. The pool of first time homebuyers has been most affected, and this is the first block of the “housing market pyramid.”
- REO saturation. When, where and how many of these properties hit the market affects home prices, and can turn the condition of any market on a dime. Clearing out the glut of bank-owned properties needs to occur, as part of the market “correcting” itself. Lenders have been suggesting that they’ll be loosening up the mortgage restrictions this year, and also promising to clear the backlog of REO properties.